9911796707
TMI Blog1984 (10) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court's order awarding interest of Rs. 1,52,470. (3.) That the learned Commissioner (Appeals) has not been justified in directing the ITO to allow interest under section 214, in consequence of the relief given by him. 2. The assessee is a private limited company. The assessee filed its return on 10-7-1978, showing the income of Rs. 2,95,682. The revised return was filed on 5-8-1978, in which the income of Rs. 1,46,632 was shown. The assessee, while filing the revised return, claimed that a sum of Rs. 1,52,470 received from Hindustan Cables Ltd., as per the Calcutta High Court's decision, being compensation was exempt. The assessee and Hindustan Cables Ltd. agreed vide their letters dated 12-2-1966 and 14-3-1966, about the supply of 110 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest on judgment, both at the rate of six per cent per annum thereafter. The decree in respect of Suit No. 722 was for the sum of Rs. 28,345.20 with interest of nine per cent from 22-8-1966 till 5-4-1967. Thereafter, the assessee was entitled to interim interest and interest on judgment at the rate of six per cent per annum and cost. The interest so awarded by the Calcutta High Court, in both the cases, had been worked out at Rs. 1,52,470. This amount was claimed by the assessee as exempt, being in the nature of compensation. The assessee before the ITO took the main plank on the terms of the contract. It was indicated by the assessee that there was no stipulation in the contract for interest and, therefore, even though the High Court has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the orders of the High Court, it is quite clear that no interest was payable to the appellant company by Hindustan Cables Ltd., as per terms of contract. In this connection, my attention was again drawn to a letter of Hindustan Cables Ltd., dated 9-11-1966, wherein it is categorically stated that no interest charges would be payable to the appellant company as 'no such charges have been provided under the terms and conditions of the order', placed on it. My attention has been also drawn to an order of the Income-tax Appellate. Tribunal, Chandigarh Bench, in IT Appeal No. 929 of 1976-77, dated 30-9-1978, where a similar issue came up for consideration. In this order of the Tribunal, there is a clear finding that award of interest by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration, it would amount to give the different interpretation to the decision. Shri Chalia referred to all the decisions cited by the assessee before the Commissioner (Appeals) and, distinguishing them on facts, urged that these decisions do not help the assessee. The interest had been awarded by the High Court and, therefore, it was correctly subjected to tax by the ITO. 5. Shri K.V. Singh, the counsel of the assessee, on the other hand, very strongly supported the order of the Commissioner (Appeals) with the help of a paper book containing 62 pages. The paper book of the assessee included the decision of the High Court in Suit Nos. 710 and 722 of 1967, the various letters exchanged between the assessee and Hindustan Cables Ltd., the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s' case and T.N.K. Govindaraju Chetty's case. But if the amount received by the assessee is in the nature of interest, it is taxable. Now, the question is, what is the nature of the additional amount received by the assessee. 8. The assessee supplied goods to Hindustan Cables Ltd. The assessee could not recover the principal amount in time, according to the contract. The assessee filed suit and the assessee claimed the principal amount and interest thereon for delayed payment as well as for the payment of interest which was made by the assessee to its banker. The assessee in Suit No. 710 of 1967 in the plaint made the claim as follows : Rs. Principal sum due as per Annexure 'D' 2,14,139.92 Interest at nine per cent per annum thereonup t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the defendant. It has been contended on behalf of the defendant that this notice is not in strict compliance with the Interest Act, as it has not been stated therein that the notice was being given under that Act and interest had been claimed, retrospectively. Be that as it may, the defendant, in any event, is entitled to interest by way of damages under section 61 of the Sale of Goods Act, which the Court in its discretion may allow. It is in evidence that the bank was charging interest from the plaintiff at the rate of nine per cent per annum. On the facts and in the circumstances, I hold that the plaintiff is entitled to interest from the defendant at the rate of nine per cent per annum from the time the said sum of Rs. 2,10,712.44 becam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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